Today's Biggest Talent-Management Challenges

Do you have the right talent in your organization? The blunt answer for many of America's largest enterprises is: "Not yet"—and the reasons are striking.

At a talent-management meeting on March 17-18 in Coronado, Calif., experts from companies such as Cisco, Gap, Toyota, Wal-Mart and Oracle gathered to share perspectives. During formal remarks at the Conference Board event, most speakers did their best to stay upbeat. But a different story emerged in the hallway chatter between sessions.

As one defense contractor put it, too many bosses' idea of talent assessment amounts to nothing more than "a lick-and-sniff dog test. It's all about whether they like someone."

How bad is it? Talent-management consultant Marc Effron hardly raised eyebrows at the conference when he unveiled a fresh survey with the following sober statistics:

18% of companies claim to be winning the war for talent. 72% portrayed it as an endless struggle in which they were neither gaining nor losing ground. 10% declared that the war for talent was winding down in defeat for their enterprise

I'm researching a book on how America picks its talent and I came away from the Coronado sessions focused on three big reasons for this year's talent turmoil. Here, in blunt language, are the issues that are jarring talent specialists the most, as well as some of attendees' best ideas about how to fix the situation.

We aren't sure what we're looking for. Even in the best-run organizations, there's always something a bit mysterious about "talent." When companies set ambitious goals but can't spell out a precise roadmap for achieving them, they usually end up hoping that an extra splash of managerial wisdom or technical know-how will make everything work out. In such situations, talent becomes clearly defined only after the fact.

That uneasy arrangement is getting even more awkward at companies where high-level strategy is rapidly changing. Boards and chief executives may have decisive ideas about how to revamp priorities to deal with emerging markets, changing labor costs, health reform or other profound changes in the business landscape. But it can take years to realign career development paths accordingly. In the mean time, if strategy and talent pipelines are out of sync, companies end up grooming lots of superbly qualified candidates for leadership in dead-end specialties.

Annmarie Neal, vice president for talent acquisition at Cisco, urged attendees to tie their talent-assessment systems more closely to their companies' strategic priorities. Simple advice, but for many companies, it was a "Eureka!" moment. All too often, attendees admitted, executives on the way up are being graded by long-established yardsticks that don't have much to do with where the business actually needs to be going.

Talent development is just a slogan, not a way of life. The finest mentoring and assessment tools aren't much use if no one puts them into action. In Effron's surveys, more than 20% of talent-management specialists conceded that their tools for succession planning, executive coaching and identifying high-potential employees are widely regarded within their own companies as not being simple or easy to use.

What happens when many managers regard the finding and grooming of future leaders as someone else's business and not theirs? In the words of Roger Cude, senior vice president for talent management at Wal-Mart, that creates a corrosive culture of "talent importers"—executives who shirk the essential but selfless tasks of developing stars themselves, instead relying on constant poaching of other units' best prospects to meet expansion needs.

But Cude says Wal-Mart has found the antidote. It tracks how well its top executives are doing to meet and inspire the company's up-and-comers. Data is shared and compared. Executives with strong scores are rewarded; those who can't be bothered are told that hey have a problem. The result, Cude says, is that Wal-Mart's intensely competitive top echelon of executives try to outdo one another in being seen as champions of talent development.

We don't know how to get better. Traditionally, the payoff from talent development efforts is hard to measure and takes years to play out. As a result, there haven't been many systematic efforts to keep track of what assessment techniques are most valuable within a company; which bosses have the best eye for talent, or what recurring mistakes ought to be fixed.

Mike Markovits, a talent expert at IBM, is trying to fix that. He is developing a tracking system that keeps track not just of executives' career paths, but also of their assessments and training along the way. That tool gives his team the potential to size up IBM's own talent-development efforts, so the company can see where it's getting the best results and where it has bottlenecks that need fixing.

It's early days, and Markovits says he doesn't want to push the system's conclusions too aggressively until he believes they will be welcomed. But he sees it as a powerful tool in taking the guesswork out of talent development.

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